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Monday 15 September 2014

Hussey got €391,000 pension contribution

Payments were on top of Rehab vice-chairman's €2.5m in fees

Published 20/04/2014 | 02:30

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DOCUMENTATION: Papers, above, that Sunday Independent got hold of and which reveal details of payments to John Hussey.

The former vice-chairman of the Rehab Group received a total of €391,000 in pension contributions from the charity on top of his €2.5m consultancy fees, documents obtained by the Sunday Independent reveal.

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An internal Rehab memo reveals that the charity made the contributions into a private pension scheme in the name of John Hussey, an accountant and brother-in-law of a Fine Gael minister.

The memo discloses that in 2003, for example, Mr Hussey was paid a director's fee of €44, 440 and also a pension contribution of €44,440 which, when combined with "management consultancy" fees of €271,759 for that year, brought his total earnings from the charity to €360,639 in one 12-month period.

Other documents reveal how payments to the Rehab directors "shocked" some board members.

The new disclosures about his pension, and the concerns they raised at board level, come as the Public Accounts Committee (PAC) began moves last week to compel Rehab's former executives, Angela Kerins and Frank Flannery, to appear before it to answer questions on pay and pensions.

Mr Hussey's deal with Rehab was put in place at a time when the charity's chief executive was Frank Flannery, a key Fine Gael strategist. Mr Hussey provided "management consultancy" services to Rehab while also serving on the board.

Rehab later hired Mr Flannery as a lobbyist paying him a total of €409,000 between 2007 and 2013. This was despite an agreement by the board that Mr Flannery would not be paid consultancy or director's fees after he became a director in 2011, a source told the Sunday Independent.

The documents obtained by this newspaper reveal that four Rehab Group directors were "shocked" at the level of payment to Mr Hussey.

Mr Hussey's consultancy fees were disclosed in the company's annual accounts. According to the minutes of a confidential meeting in November 2004, four directors – Phil Cremin, from Wexford, Padraig Lydon, from Athlone, Gerry Herlihy, from Kilkenny, and Noreen Gildea, from west Cork – were unaware, until then, of the full details of the fees he was paid.

They were briefed by Ms Kerins, who was then the charity's director of public affairs, at a meeting in the Heritage Hotel in Portlaoise.

According to the minutes: "Ms Kerins stated that while she could not answer all questions she had been given documents from Frank Flannery and Keith Poole (director of finance) and therefore she could answer a number of them."

The minutes continued: "Significant discussion was held on the matter of fees in general and J Hussey's fees and consultancy in particular."

The four directors recorded "their shock and dismay at the levels of payments to John Hussey which was paid without their knowledge. Members are also angry that the PriceWaterhouseCoopers report was seemingly withheld from them until recently. The members require that the rationale and authority as to why payments were made be answered by the signatories to the contracts and approval processes".

A list was also circulated at the meeting naming seven directors who had been paid fees in 2003, for serving on the subsidiary boards in the Rehab Group.

Mr Hussey was named as receiving a director's fee of €44,440 and a separate pension contribution of €44,440, in addition to consultancy fees of €271,759 that year. Joe Treacy (who was also chairman of the Rehab Group), HD Cashell and Liam Hogan were paid director's fees of €19,050 each in 2003. Barry Keogh, Enda Marren and Tom Clarke were each paid director's fees of €12,700 that year.

Those at the meeting sought a review of Mr Hussey's contract. The minutes stated: "As the nominal value . . . still outstanding is €575,000, it was agreed that Colm Allen (the late barrister and a Rehab Group director) and Joe Treacy would negotiate on behalf of the Rehab Group with John Hussey to full and final settlement of the contract at €300,000 or less and exit."

The meeting ended with a recommendation that a joint committee of Rehab management and directors review the group's structures "on a go forward basis".

Calls to Mr Hussey's residence were not returned last week.

Rehab said Mr Hussey announced his attention to resign in December 2004 but continued to do consultancy work. "In 2005, Mr Hussey was paid a lower fee for consultancy than in 2004, and in 2006 it was decided to discontinue Mr Hussey's consultancy arrangement and on advice, in order to terminate his contract a final payment of €175,000 was made."

The Rehab Group told the Sunday Independent this weekend it could find no record that concerns were raised about the fees at board level at the time. "The records of Board meetings do not reflect such a discussion at the Rehab Group Board. However, an informal meeting of some directors took place in November 2004 at which attendees were briefed in relation to director's fees."

The disability charity did confirm that "an element of one director's remuneration" was paid into a Revenue-approved defined contribution scheme from 1997 to 2004. It said this was "at the request of that director" but did not identify Mr Hussey. The charity confirmed that in total, it paid €391,000 into the pension in that period.

Rehab said it paid a total of €1.46m in fees to board members, including Mr Hussey, between 1995 and 2006, when the practice of paying fees to directors stopped.

Rehab directors did not disclose any concerns about fees during Mr Flannery's stewardship of the disability charity when they appeared before the PAC 10 days ago. John McGuinness, the chairman of the PAC, said last week the committee was only "told part of the story of consultancy fees" by Rehab directors.

Liam Hogan, Declan Doyle and Brian Kerr, who represented Rehab at the PAC, were all on Rehab's board in 2004, 2005 and 2006.

Mr Doyle was on the remuneration committee, while Mr Hogan and Brian Kerr were members of Rehab's audit committee during the same period.

Sunday Independent

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